Incentivizing salespeople key during crisis

Industry

When it became clear that COVID-19 would spark months of uncertainty across the auto industry, Boris Lopez knew he would need to get creative to weather the storm.

After all, Lopez, director at South Dade Toyota of Homestead, Fla., and South Dade Kia of Miami, said he has been thinking of contingency plans for major hits to the automotive business since the Great Recession.

“I always have in the back of my mind, what happens if we go back to 2008, 2009? What would be the worst-case scenario for us?” Lopez told Automotive News. “I always prepare for how fast can I reduce 30 percent of my expenses, because my expectation would be sales would drop 30 percent.”

In March, Lopez began thinking of ways to tighten up spending, motivate and assure his employees and keep his stores afloat.

“We need to be ready,” Lopez, 39, said. “Even in the worst time — 2008, 2009 — people buy cars. The difference is where. We need to make sure we are the one.”

Lopez decided to decrease vendor spend and divert that money to incentivize his salespeople to take on new roles.

Lopez — a 2020 Automotive News 40 Under 40 honoree — reduced spending on data- mining vendors and Google and Facebook, which combined freed up about $80,000 per month. “The idea was, let me freeze as much as possible the vendors that drive traffic right now and move that load to the sales team. Customer behavior was changing,” he said.

“I stopped the vendors that have some value for the store but cost a lot of money,” he added. This went directly toward a new bonus for his sales staff.

Lopez’s 32 salespeople began making at least 40 phone calls a day to customers of the two stores — but not with the intent of selling a car. Instead, it was to ask how they were doing and whether the dealership could assist with anything, such as deferring payments, vehicle service or personal needs.

A minimum $100 bonus was given if the customer made an appointment to discuss finances or other services.

Though many of his employees hadn’t taken on this type of role before, Lopez said he quickly saw a positive response from customers — and he refined the approach with his staff every day based on feedback.

He took on a motto of, “I’m not here to sell you, I’m here to help you,” he said. “From that time, I said, I would rather drive the behavior from the people” than vendors.

In 2019, Lopez sold 3,181 new vehicles and 1,555 used vehicles. The Kia store’s new-vehicle sales grew 16 percent year over year in April and service revenue edged up 2 percent. The Toyota store saw a 1 percent increase in new-vehicle sales for April and a 7 percent drop in service revenues. Lopez says the decrease was less than it would have been without the calling strategy.

Lopez’s employees are still making calls and engaging with customers over the phone as uncertainties continue. In addition to the daily calls, Lopez has kept employees informed of developments during the crisis.

“I created a daily email that I sent every night informing pretty much everybody in the company what was happening,” Lopez said. He sent 68 nightly emails with critical information about the state of the dealerships, important things for employees to keep in mind and updates on the pandemic itself, until he switched to sending them weekly.

Throughout the crisis, Lopez said he has learned the importance of contingency planning and communication with both customers and staff. “A big lesson is we need to be innovative,” he said. “Let’s spend time on how we can do it different.”

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